Risk Buoyed Ahead Fed Blackout

Tsys weaker across the board but off midday lows after the bell, 30YY +.0943 at 3.6555% vs. 3.6646% high, yield curves bear steepening (2s10s +4.530 at -69.177. Decent volumes (TYH3 >1.2M) on a relatively subdued session w/ the Federal Reserve heading into policy blackout at midnight (through Feb 2).

• Sole data point underscored move: Existing home sales fell by less than expected in December, -1.5% M/M (cons -3.4%) after -7.9% M/M, faring better than the latest slide in pending home sales. It left an 18% decline on the year for the sharpest annual decline since 2008.
• While Bonds dragging short end rates lower, market expectation for 25bp hike at next FOMC on Feb 1 stable: Fed funds implied hike for Feb'23 25.8bp, Mar'23 cumulative steady 45.1bp to 4.783%, May'23 steady at 55.6bp to 4.888%, terminal dips slightly to 4.890% in Jun'23.
• No concerted headline driver, Bond weakness more tied to concerted commentary from various central bank officials (not just Fed) on improved global outlook in past couple weeks lending to intermediate-long end pressure on those growth prospects.
• Risk buoyed by dovish comments from Fed Gov Waller, favoring another downshift at the next meeting ending February 1 to a 25bp rate hike but anticipates continued tightening going forward.